You can build a $1,000,000 business just targeting these types of little discussed parcels of land...
Jul 25, 2024
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Discover the lucrative niche of rural infill land flipping, focusing on affordable parcels with quick turnover potential. Learn the benefits of owner financing and strategic partnerships with builders to boost sale prices. Understand the importance of zoning and neighborhood conditions when evaluating properties. Hear a compelling case study of a parcel bought for just $5,000 and how smart enhancements led to increased market value. This niche offers flexible strategies perfect for both novice and seasoned investors.
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Quick takeaways
Investing in rural infill lots is profitable due to their low purchase price and various flexible exit strategies like owner financing.
Buyers should conduct thorough due diligence on neighborhood conditions and necessary perk tests to assess investment viability.
Deep dives
Maximizing Opportunities with Rural Infill Lots
Focusing on rural infill lots presents ample opportunities for land flipping due to their lower cost and high availability. These lots, typically under two acres, are abundant compared to larger parcels, enabling investors to minimize expenditures while maximizing potential profits. Buyers often find these parcels attractive because they are cheaper, typically ranging from one to three thousand dollars, making it easy to enter the market without the need for funding partners. Such lots also offer various exit strategies, including owner financing and partnerships with local mobile home builders, creating flexibility in how investors can sell these properties.
The Benefits of Owner Financing
Owner financing serves as a valuable tool in the rural infill lot market, allowing buyers more access to properties without traditional lending requirements. Many buyers find it difficult to secure bank financing for lower-valued lots, leading to a preference for owner-financing arrangements, which can also include interest rate arbitrage opportunities for investors. This financing method can lead to reduced taxes on sales by spreading capital gains over time, allowing sellers to obtain higher prices through manageable payment structures. Therefore, implementing owner financing not only improves cash flow but also enhances sales potential for rural infill lots.
Navigating Risks in Rural Infill Lots
Investors must be cautious when purchasing rural infill lots due to specific risks, including the necessity of passing a perk test for septic systems. If a lot fails to perk, its value significantly diminishes, as many of these parcels are intended for building rather than recreational use. Additionally, varying neighborhood conditions can impact the desirability and saleability of a property; lots located in declining areas may struggle to sell, potentially resulting in losses. Monitoring market health, such as days on market for comparable properties, is crucial in determining the viability of investing in specific rural areas.